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Thursday, October 18, 2012

Facebook Inc (NASDAQ:FB): What To Expect On Earnings Day Amid Tech Slowdown?

Facebook Inc (NASDAQ:FB) which reports its third
quarter results on October 23 is expected to post earnings of $0.11 per share
on revenues of $1.23 billion.

The Street expects revenue guidance for the fourth
quarter at $1.43 billion.

The Street will be expecting the management to provide
more clarity on what the company plan to do with mobile monetisation and
increase revenues from its vast population that has migrated to mobile devices.

Facebook usage on desktops has fallen while mobile usage
has risen proportionately and continues to grow at high single digit figures,
an indication that mobile migration has picked up pace and is happening faster.

The social media network that reported its first
public results after listing showed a slowing revenue growth while there were
no initiatives to monetise its mobile user base.

Investors and analysts expect Facebook to place more
emphasis on cross-platform analytics to deliver consistency and accurate
measurements for marketers, Seeking Alpha said.

"This will allow Facebook to leverage its massive
database of user information to explore advertising opportunities outside of
the Facebook platform," it said.

Apart from ad revenues, the company will also be
seeking to raise revenues from e-commerce that could be a potential opportunity
for Facebook. The company has already started on this in a small way by
launching Facebook Gifts, where users can buy and send gifts to their friends,
directly from the platform.

Jiang Zhang, writing in Seeking Alpha, said that he
maintained his price target of $25 and his equal-weight rating on the stock.